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The LTE spectrum auction in the UK produced Â£2.34 billion (â‚¬2.68 billion) in revenue for the British government, significantly below the government's expectation of Â£3.5 billion, and analysts agree that the prices paid by the UK operators were below what others have paid for similar spectrum. Analysts ascribed several reasons for the gap, including less demand and more supply of spectrum than in other markets.

Analysts from both Analysys Mason and New Street Research came to similar valuations for the block of spectrum telecoms regulator Ofcom auctioned in the 800 MHz and 2.6 GHz bands on a per MHz POP basis, the common industry metric for valuing spectrum. Analysys Mason assumed values of Â£0.44 (â‚¬0.51) per MHz pop for the 800 MHz spectrum, Â£0.07 (â‚¬0.08) for the paired 2.6 GHz spectrum and Â£0.04 (â‚¬0.04) for the unpaired 2.6 GHzÂ spectrum.

Those estimates were roughly in line with New Street analyst Jonathan Chaplin's calculations, though his were slightly lower for the 800 MHz spectrum, higher for the paired 2.6 GHz airwaves and lower for the unpaired 2.6 GHz.

"Our estimate of the UK 800 MHz price is very close to a straight average of the prices paid in other European 800 MHz auctions, although it is about 20 per cent lower than the population-weighted average (given that the prices paid in France, Germany and Italy were all higher than those paid in the UK)," wrote Analysys Mason analyst Philip Bates. "As well as factors relating to the auction design and the competitive environment in each country, the lower price may be a reflection of difficult market conditions and the increased likelihood since the World Radiocommunication Conference 2012 that the 700MHz band will be harmonised for mobile use across Europe after 2015, thus increasing the supply of low-frequency spectrum."

Bates also wrote that Analysys Mason's estimate for the 2.6 GHz spectrum "is slightly above the average price paid in other European countries. Among the 'big five' European economies, only France has achieved a higher price. The relatively high price paid in the UK may reflect the greater number of bidders for the 260 0MHz spectrum (BT, which does not currently operate a mobile network in the UK, eventually won 30 MHz of paired and 20 MHz of unpaired spectrum) or the growing support for TD-LTE in the 2600 MHz unpaired band."

Chaplin said that the valuations for the UK spectrum were significantly below similar spectrum valuations in the United States. He said the gap exists for several reasons, including the fact that "the UK has allocated more spectrum to carriers than the U.S., which lowers the value of marginal spectrum in the UK. The UK has allocated carriers 500 MHz of paired spectrum below 2.5GHz, which compares to 420 MHz in the U.S."

Chaplin also said that the UK just has less demand for mobile services than the U.S. "The U.S. has 3x the voice traffic and 2x the data traffic per POP," he wrote in a research note to clients. "When coupled with the fact that the U.S. has less spectrum in total, this has two implications: first, it lowers the value of any new spectrum coming to market in the UK; second, it significantly lowers the value of marginal spectrum (like 2.5 GHz) relative to more "mainstream" spectrum (like 700/800MHz or AWS).

Additionally, Chaplin said that the UK wireless industry has among the lowest after tax returns in Europe and significantly lower returns than the U.S., which drives lower spectrum values in the UK relative to Europe and the U.S.Â

Analysys Mason's Bates said however that "the value raised by the UK auction appears a little low, but not totally out of line with relevant benchmarks. Perhaps the real reason for the difference between the results and the initial government estimates is that many--including the Treasury--implicitly expected the UK to raise an amount above the benchmark average."

EE, the largest UK operator, paid Â£588.8 million to buy spectrum at 800 MHz and 2.6 GHz to extend coverage countrywide, including LTE, Ofcom said. 3UK, Vodafone and TelefÃ³nica's O2 UK are expected to launch LTE service later this year using the spectrum they won at auction. Wireline giant BT paid Â£186 million for three blocks of 2.6 GHz spectrum, which it will use to provide its customers with better mobile broadband. However, as a new entrant to mobile, the company does not plan to build a national mobile network, according to Reuters, meaning it will likely become an MVNO of another operator, perhaps EE or Vodafone.

The LTE spectrum auction in the UK produced Â£2.34 billion (â‚¬2.68 billion) in revenue for the British government, significantly below the government's expectation of Â£3.5 billion, and analysts agree that the prices paid by the UK operators were below what others have paid for similar spectrum. Analysts ascribed several reasons for the gap, including less demand and more supply of spectrum than in other markets.

Analysts from both Analysys Mason and New Street Research came to similar valuations for the block of spectrum telecoms regulator Ofcom auctioned in the 800 MHz and 2.6 GHz bands on a per MHz POP basis, the common industry metric for valuing spectrum. Analysys Mason assumed values of Â£0.44 (â‚¬0.51) per MHz pop for the 800 MHz spectrum, Â£0.07 (â‚¬0.08) for the paired 2.6 GHz spectrum and Â£0.04 (â‚¬0.04) for the unpaired 2.6 GHzÂ spectrum.

Those estimates were roughly in line with New Street analyst Jonathan Chaplin's calculations, though his were slightly lower for the 800 MHz spectrum, higher for the paired 2.6 GHz airwaves and lower for the unpaired 2.6 GHz.

"Our estimate of the UK 800 MHz price is very close to a straight average of the prices paid in other European 800 MHz auctions, although it is about 20 per cent lower than the population-weighted average (given that the prices paid in France, Germany and Italy were all higher than those paid in the UK)," wrote Analysys Mason analyst Philip Bates. "As well as factors relating to the auction design and the competitive environment in each country, the lower price may be a reflection of difficult market conditions and the increased likelihood since the World Radiocommunication Conference 2012 that the 700MHz band will be harmonised for mobile use across Europe after 2015, thus increasing the supply of low-frequency spectrum."

Bates also wrote that Analysys Mason's estimate for the 2.6 GHz spectrum "is slightly above the average price paid in other European countries. Among the 'big five' European economies, only France has achieved a higher price. The relatively high price paid in the UK may reflect the greater number of bidders for the 260 0MHz spectrum (BT, which does not currently operate a mobile network in the UK, eventually won 30 MHz of paired and 20 MHz of unpaired spectrum) or the growing support for TD-LTE in the 2600 MHz unpaired band."

Chaplin said that the valuations for the UK spectrum were significantly below similar spectrum valuations in the United States. He said the gap exists for several reasons, including the fact that "the UK has allocated more spectrum to carriers than the U.S., which lowers the value of marginal spectrum in the UK. The UK has allocated carriers 500 MHz of paired spectrum below 2.5GHz, which compares to 420 MHz in the U.S."

Chaplin also said that the UK just has less demand for mobile services than the U.S. "The U.S. has 3x the voice traffic and 2x the data traffic per POP," he wrote in a research note to clients. "When coupled with the fact that the U.S. has less spectrum in total, this has two implications: first, it lowers the value of any new spectrum coming to market in the UK; second, it significantly lowers the value of marginal spectrum (like 2.5 GHz) relative to more "mainstream" spectrum (like 700/800MHz or AWS).

Additionally, Chaplin said that the UK wireless industry has among the lowest after tax returns in Europe and significantly lower returns than the U.S., which drives lower spectrum values in the UK relative to Europe and the U.S.Â

Analysys Mason's Bates said however that "the value raised by the UK auction appears a little low, but not totally out of line with relevant benchmarks. Perhaps the real reason for the difference between the results and the initial government estimates is that many--including the Treasury--implicitly expected the UK to raise an amount above the benchmark average."

EE, the largest UK operator, paid Â£588.8 million to buy spectrum at 800 MHz and 2.6 GHz to extend coverage countrywide, including LTE, Ofcom said. 3UK, Vodafone and TelefÃ³nica's O2 UK are expected to launch LTE service later this year using the spectrum they won at auction. Wireline giant BT paid Â£186 million for three blocks of 2.6 GHz spectrum, which it will use to provide its customers with better mobile broadband. However, as a new entrant to mobile, the company does not plan to build a national mobile network, according to Reuters, meaning it will likely become an MVNO of another operator, perhaps EE or Vodafone.

Nokia (NYSE:NOK) plans to use its time at the Mobile World Congress trade show next week in Barcelona, Spain, to announce low-cost handsets and a smartphone running Microsoft's (NASDAQ:MSFT) Windows Phone software, according to a Reuters article.

The report, citing unnamed sources within Nokia, said the company will unveil phones aimed at combating Chinese vendors like Huawei and ZTE, which have been inching their way up the handset ranks by providing low-end smartphones and, increasingly, some higher-end models. Nokia also plans to announce a low-end Lumia Windows Phone model, the report said. Nokia declined to comment, according to Reuters.

Nokia is holding a press conference at MWC on the morning of Feb. 25 and is widely expected to announce some combination of new devices. Last year in Barcelona Nokia announced it would sell the low-end Lumia 610 as well as itsÂ high-end Lumia 900 in more markets. Nokia also announced at MWC last year three new phones for its Asha line, which is aimed primarily at emerging markets. Rumors have also indicated that Nokia may announce a Windows Phone using its PureView camera technology and perhaps a Windows tablet.

The report comes shortly after Samsung Electronics announced a new handset line called Rex that is aimed at emerging markets. Some interpreted that move as the beginning of a battle between Samsung's Rex brand and Nokia's Asha line.

Nokia has already made moves recently to shore up its position in the low end of the market. Last week Nokia introduced the Asha 310, a new, dual-SIM phone with Wi-Fi support. Nokia said the device will be available in Asia, India, the Middle East, Africa and Brazil starting this quarter for a suggested price of $102 before taxes and subsidies. In the fourth quarter Nokia sold 9.3 million Asha phones, more than twice the 4.4 million Lumias it sold. During the second half of 2012 Nokia shipped 15.8 million Asha phones, compared with 7.3 million Lumias.

Nokia (NYSE:NOK) plans to use its time at the Mobile World Congress trade show next week in Barcelona, Spain, to announce low-cost handsets and a smartphone running Microsoft's (NASDAQ:MSFT) Windows Phone software, according to a Reuters article.

The report, citing unnamed sources within Nokia, said the company will unveil phones aimed at combating Chinese vendors like Huawei and ZTE, which have been inching their way up the handset ranks by providing low-end smartphones and, increasingly, some higher-end models. Nokia also plans to announce a low-end Lumia Windows Phone model, the report said. Nokia declined to comment, according to Reuters.

Nokia is holding a press conference at MWC on the morning of Feb. 25 and is widely expected to announce some combination of new devices. Last year in Barcelona Nokia announced it would sell the low-end Lumia 610 as well as itsÂ high-end Lumia 900 in more markets. Nokia also announced at MWC last year three new phones for its Asha line, which is aimed primarily at emerging markets. Rumors have also indicated that Nokia may announce a Windows Phone using its PureView camera technology and perhaps a Windows tablet.

The report comes shortly after Samsung Electronics announced a new handset line called Rex that is aimed at emerging markets. Some interpreted that move as the beginning of a battle between Samsung's Rex brand and Nokia's Asha line.

Nokia has already made moves recently to shore up its position in the low end of the market. Last week Nokia introduced the Asha 310, a new, dual-SIM phone with Wi-Fi support. Nokia said the device will be available in Asia, India, the Middle East, Africa and Brazil starting this quarter for a suggested price of $102 before taxes and subsidies. In the fourth quarter Nokia sold 9.3 million Asha phones, more than twice the 4.4 million Lumias it sold. During the second half of 2012 Nokia shipped 15.8 million Asha phones, compared with 7.3 million Lumias.